Overview of Energy in the Overview of Energy in the USAUSA

With your host: Paul With your host: Paul Smith Two-time Smith Two-time Congressional Congressional

Candidate for CongressCandidate for Congress..

• Co-Owner of the SmithHeggumReport.com• WWW.SmithHeggumReport.com• Consulted by TV stations and Radio stations

across the country during the Fukishima disaster• Consulted on the War Powers Act for interviews• Civilian Advisor to the BRC on Nuclear Energy

Where are we in the U.S. in EnergyWhere are we in the U.S. in Energy

• Solar

• Nuclear

• Oil and Natural Gas

• Wind

• Ethanol

• Others

What is our National Energy Plan?What is our National Energy Plan?

• Do we have the right guys in Government?

• 911 commission report

• Shuttle disaster report

• Three Mile Island

• We no longer have the luxury of relying on politicians and appointees to adequately understand the energy issues.

ChinaChina

• China is currently constructing about 22 nuclear plants and unknown amount of coal generation plants (up to 100).  The have stated goals to add 200 of each in less than 30 years.  Why?  China has a committee that is in charge of growth.  They have determined they will need power to grow the economy.

CanadaCanada

• 20,000+ oil industry construction jobs are being thrown under Obama’s 2012 campaign bus, largely because the president needs to pump up his sagging support among the environmentalists.

• This is in addition to more than 150,000 oil and coal related jobs Obama has already cost the U.S. economy.

• The construction jobs, and the revenue from operating the Keystone XL pipeline, will now go to Canadian workers.

CanadaCanada• That’s because Canadian government officials

are already moving to instead build the pipeline from Alberta’s oil fields to new West Coast ports near Vancouver. The likely destination point is the port of Kitimat in British Columbia.

• Obama will delay for a study of an alternative route for the Keystone pipeline, even though an earlier U.S. Department of State study had already concluded the proposed route is the best of several alternatives. The new study will delay any final approval two years and until after the 2012 election, allowing Obama to boost his support among environmentalist groups and activists.

U.S.U.S.

• But the delay will kill any U.S. segment of the pipeline, because the decision will spur the development of the pipeline through Canada instead.

• The job-killing decision was panned by GOP legislators and business groups.

• “More than 20,000 new American jobs have just been sacrificed in the name of political expediency,” said a statement from Ohio Rep. John Boehner, the Speaker of the House of Representatives.

ObamaObama

• “This is clearly a political decision and everyone knows it… Politics has trumped jobs in this decision as Obama’s stalling will enable Canada to turn their pipeline west and ship their energy and American jobs elsewhere,” said statement from the U.S. Chamber of Commerce.

• The oil that would be pumped through the Keystone XL pipeline would make gas cheaper for American drivers, but worsen the competitiveness of Obama’s pet green-tech companies.

KeystoneKeystone

Who is buying Natural Gas?Who is buying Natural Gas?

• China and Vladimir Putin

• Plants, leases and land all over the world

• Why?

• What is the U.S. doing?

• Investing our future in corn, solar and wind

• Who must change the thinking?

LNGLNG

• Liquefied Natural Gas.

• Cooled to a minus 260 degrees Fahrenheit.

• Takes up 1/600th of the space

• Safe and does not harm the ozone layer.

• Let’s take a look at it. What is Fracking? http://youtu.be/lB3FOJjpy7s

LNG Is it safe?LNG Is it safe?

• Watch the demo

• http://www.lngfacts.org/

• Issues

• Fueling stations

• National energy policy

• Environmental damages/challenges

LNG LNG

• Aldyl-A plastic pipe that was laid pre-1973

• Cracking and turns brittle

• We cannot safely guarantee delivery of enough natural gas in our cities at this time

• Without spending billions to lay down new pipe.

LNGLNG

• PG&E is replacing 1,231 miles of defective pipe. Legislation is being proposed.

• Pipe failed in the Aug 31st explosion in Cupertino and the Sept 27th rupture in Roseville

• What has this admin spent money on?

• Solar and wind. End.

LNGLNG

• Just in the sewer replacement in Sacramento it will take 635 years to replace the underground pipes

• But what are the politicians working on?

• No long term planning or concern

• Time to change that!

OilOil

• $600 million of the countries wealth is transferred per day to the Middle East to buy oil

• Jones Act: Costs the U.S. 30% more for imported oil.

• Leases vs. permits.

• Where is most of the oil?

OilOil

• The flow of petrodollars from the US has also decimated the US foreign policy in those countries as it relates to human rights, the war on terrorism and nuclear issues. Here is a quote from Condoleezza Rice testifying at the Senate Foreign Relations Committee. “We have to do something about the energy problem.  I can tell you that energy is…warping diplomacy around the world.  It has given extraordinary power to some states that are using that power in not very good ways.”

Bakken Oil ResrvesBakken Oil Resrves

• 8 times as much oil as Saudi Arabia

18 times as much oil as Iraq

21 times as much oil as Kuwait

22 times as much oil as Iran

500 times as much oil as Yemen

Bakken Oil FieldsBakken Oil Fields• Recent technological breakthroughs has opened

up the Bakken's massive reserves.

• We now have access of up to 500 billion barrels. And because this is light, sweet oil…

• Those billions of barrels will cost Americans just $16 PER BARREL!

• That's enough crude to fully fuel the American economy for 2041 years straight.

OilOil

• Platforms

• Slant drilling

• Jobs

• Politics

• Lands Commission

• More politics

OilOil

• The petroleum industry is responsible for 332,968 jobs in California that generate $17 billion in wages and salaries.  That’s a huge contribution to a state that has been losing its manufacturing and industrial employment base and that currently has an unemployment rate of 11.8 percent.

OilOil

• For every job created by an oil company or other business directly associated with petroleum, another 2.5 indirect jobs are created in the economy.

• This multiplier effect is especially pronounced in the refining and oil production areas.  For every direct refinery job in California, another nine jobs are created.  For every job in California’s oil and gas production fields, another 5.4 jobs are created.

OilOil

• In addition to the jobs and labor income generated by the petroleum industry, the study also looked at the industry’s contribution to state, local and federal governments through taxes and fees.  Oil and natural gas companies provided $5.7 billion in taxes and fees to the state of California in 2009 – the last year for which publicly available data is available.  Another $2.8 billion in taxes were sent to the federal government.

OilOil

OilOil

• We now refine less oil today then we did 30 years ago.

• If we started drilling for oil here, we would have to send it out to Mexico and Canada to get it refined.

• Why?

OilOil

• Of California sits approved lease that would support 54 oil platforms.

• Cost of $1 billion a platform

• Currently made in S. Korea

• Estimated jobs 100,000

• Estimated revenue to the State of Ca.

• $22 billion a year.

OilOil

• 97% of the U.S. transportation requires oil.  That drives about 220 million cars and trucks annually here. 

• After about 10 miles out to sea, you can’t see a platform

• What is slant drilling? http://youtu.be/xwAwh1QN-wQ

• Go out 8 miles

OilOil

• Cuba plans to build a deep-water rig and drill for oil in its sovereign waters 50 miles off the Florida coast. None of the oil would flow into our country, although the United States would endure any environmental damage caused by a spill.

• Right now, an enormous oil rig, manufactured in China, is enroute to its approximate location---halfway between Key West, Florida and the shores of communist Cuba. Drilling could begin as early as December

OilOil

Alaskan PipelineAlaskan Pipeline

ANWRANWR

ANWRANWR

ANWRANWR

How much Oil?How much Oil?

• 700k barrels a day

• Down from 2.2 million

• Pipeline in danger of clogs and corrosion

• Dismantled by law

• Obama complicit with the Greens

• How? Permits

What oil?What oil?

• To the west 23 million acre National Petroleum Reserve 15 billion Barrels

• ANWR 16 billion barrels

• To the North the Beaufort and Chukchi Seas 30 billion barrels

• Takes about 35 permits to drill.

• Enviro’s sue on every one

• Oil Co. give up.

Enviro’s ConcernEnviro’s Concern

ANWR WinterANWR Winter

Terrible for BearsTerrible for Bears

ANWR SummertimeANWR Summertime

The 2,000 AcreThe 2,000 Acre

EthanolEthanol

What you are not being toldWhat you are not being told

• Co2 Exemption

• Water issues

• Gas requirements

• Fertilizer

• Leaching

• Octane levels

• Sugar Cane

SOLARSOLAR

• "We have incurred significant net losses since our inception, including a net loss of $114.1 million in 2007, $232.1 million in 2008 and $119.8 million in the first nine months of fiscal 2009, and we had an accumulated deficit of $505 million at Oct. 3, 2009," the company said in a December 2009 filing to the SEC. "We expect to continue to incur significant operating and net losses and negative cash flow from operations for the foreseeable future."

SolyndraSolyndra

• $535 million loss

• Blamed lower cost China

• Blamed Europe’s end to subsidizing solar and caused less orders to the company

• Business plan never factored in making a profit

SOLARSOLAR

• The U.S. Bureau of Land Management, which is in charge of making sure land is developed for wind, solar and geo-thermal energy development, ordered the construction of a solar plant halted just outside the Mojave National Preserve.  Environmentalist complained and federal officials determined,  that 162 adult tortoises would have to be moved, and 700 juvenile tortoises would die during construction on a 5 -acre parcel.

SOLARSOLAR

• Secretary of the Interior  Ken Salazar announced plans to blanket 1,000 square miles of land in Arizona, New Mexico, California, Colorado, and Utah with solar collectors. 

• one million megawatt hours power 90,000 homes.

Solar MapSolar Map

SOLARSOLAR

• For 1,000 square miles! 

• It will generate a paltry 35, 000 megawatts of electricity and only during the day.

• Or power a total of 3,000 homes

Issues with SolarIssues with Solar

•

NuclearNuclear

Japan and what happenedJapan and what happened

• 9.0 Earthquake

• Tsunami

• Electricity issues

• Gen 2 plant

• Believability

• Future for Japan

2nd Gen Reactor2nd Gen Reactor

Nuclear in the USANuclear in the USA

• All 2nd Gen

• Last built in 1978

• Waste issues

• Transpo and storage

• Safety

• Future

Holding poolsHolding pools

How much energy?How much energy?

• The splitting of one U-235 atom into two smaller atoms releases an enormous amount of energy - about a million electron volts for each split atom.

• The stored energy in a pound of "enriched" uranium is equivalent to about a million gallons of gasoline.

Waste disposal WIPPWaste disposal WIPP

Waste disposalWaste disposal

WasteWaste

Waste DisposalWaste Disposal

IssuesIssues

• Political

• Costs

• Education

• Enviro’s

• Aging Plants

• Thorium see next slides

ThoriumThorium• Thorium has an energy density far greater than any other

element in the periodic table: one ton of thorium is equivalent to 200 tons of uranium. It’s 100 % useable; it doesn’t need processing or enriching. It’s an enormous untapped resource.

• Thorium is more abundant than uranium, with enough thorium deposits to power the world for many thousands of years, and it generates much less radioactive waste when burned in reactors. It can even be mixed with waste from conventional reactors to burn it up.

• The main obstacle is that the nuclear industry has a huge reactor and fuel infrastructure based on uranium and plutonium. An enormous additional investment would be needed to shift to thorium.

ThoriumThorium

• Weapons-grade fissionable material (233U) is harder to retrieve clandestinely from a thorium reactor;

• Thorium produces 10 to 10,000 times less long-lived radioactive waste;

• Thorium comes out of the ground as a 100% pure, usable isotope, which does not require enrichment, whereas natural uranium contains only 0.7% fissionable U-235;

• Thorium cannot sustain a nuclear chain reaction without priming, so fission stops by default.

Politics of Nuclear EnergyPolitics of Nuclear Energy

• Why not Thorium?

• Atomic Energy Commission

• Nuclear Regulatory Commission

• BRC on Nuclear Energy

• Congress

• Yucca Mountain

• Who is building?

Wind PowerWind Power

Wind PowerWind Power

Wind PowerWind Power

Wind PowerWind Power

• Secretary of the Interior  Ken Salazar dropped a bomb and said he wanted to generate 20% of our electricity from wind!  That translates to about 186,000 50- story wind turbines which will cover the size of the state of West Virginia and about 19,000 miles of new high voltage transmission lines.

Wind Power… who wins?Wind Power… who wins?

• Stimulus Bill• Iberdrola, one of the largest operators of

renewable energy worldwide, is based in Spain and has received the most U.S. stimulus dollars — $577 million.  It buys some of its turbines from another Spanish manufacturer, Gamesa, which has a U.S. connection. Gamesa has two facilities to manufacture turbine blades in Pennsylvania, but the company said the market forced it to temporarily lay off nearly 100 workers. 

Wind PowerWind Power

• I Interviewed Bob Gates, Chief Commercial Officer for Clipper Turbines on 2/11/10.  Here are my notes.

•   • 70-75% of the cost of a wind turbine is in the manufacturing of the

turbine.  5% goes to assembly.  The Non-US owners of Wind Turbine Farms are ordering turbines from foreign companies.  They bring them to the states, finish assembling them and the US Gov’t pays for it.

•  • There is no provision for the Stimulus money to go to US companies

thereby not putting the US worker back to work, but allowing his foreign counter-part to do so.

•  • Bob said that the US Gov’t pays them a 30% profit which goes back

to the foreign turbine manufacturer.

Wind what you don’t knowWind what you don’t know

NeodymiumNeodymium

• On the outskirts of one of China’s most polluted cities, an old farmer stares despairingly out across an immense lake of bubbling toxic waste covered in black dust. He remembers it as fields of wheat and corn.

TurbinesTurbines

Wind WasteWind Waste

Wind SecretsWind Secrets

• Vast fortunes are being amassed here in Inner Mongolia; the region has more than 90 per cent of the world’s legal reserves of rare earth metals, and specifically Neodymium, the element needed to make the magnets in the most striking of green energy producers, wind turbines.

Dirty Little Wind SecretsDirty Little Wind Secrets

• Hidden out of sight behind smoke-shrouded factory complexes in the city of Baotou, and patrolled by platoons of security guards, lies a five-mile wide ‘tailing’ lake. It has killed farmland for miles around, made thousands of people ill and put one of China’s key waterways in jeopardy.

• This vast, hissing cauldron of chemicals is the dumping ground for seven million tons a year of mined rare earth after it has been doused in acid and chemicals and processed through red-hot furnaces to extract its components.

Wind SecretsWind Secrets

• At first it was just a hole in the ground,’ he says. ‘When it dried in the winter and summer, it turned into a black crust and children would play on it. Then one or two of them fell through and drowned in the sludge below. Since then, children have stayed away.’

• As more factories sprang up, the banks grew higher, the lake grew larger and the stench and fumes grew more overwhelming.

Villagers Su Bairen, 69, and Yan Villagers Su Bairen, 69, and Yan Man Jia Hong, 74, stand on the Man Jia Hong, 74, stand on the

edge of the six-mile-wide toxic lake edge of the six-mile-wide toxic lake in Baotouin Baotou

Wind TurbinesWind Turbines

• With the rise of alternative energy solutions has neodymium really come to prominence, for use in hybrid cars and wind turbines. A direct-drive permanent-magnet generator for a top capacity wind turbine would use 4,400lb of neodymium-based permanent magnet material.

EthanolEthanol• Ethanol can’t travel in pipelines along with gasoline,

because it picks up excess water and impurities.  As a result, ethanol needs to be transported by trucks, trains, or barges, which is more expensive and complicated than sending it down a pipeline.  As refiners switched to ethanol this spring, the change in transport contributed to the rise in gas prices.  Some experts argue that the U. S. doesn’t have adequate infrastructure for wide ethanol use.

• Also, ethanol contains less energy than gas.  That means drivers have to make more frequent trips to the pump, costing you more money to travel the same amount of mileage.  How many of you can afford to fill up your car 2-3 times more per month?

EthanolEthanol

• Breaks down fiberglass tanks on boats

• Rusts metal tanks from the inside out

• Drains into waterways

• Gums up fuel injectors

• Ruins engines Voids Warranties

• Will be outlawed in 2012 in CA.

Mandated and subsidizedMandated and subsidized

• .45 cent to oil co. for every gallon they blend with ethanol

• ETHANOL TARIFF .54 cents and a 2.5% ad valorem tax on imported ethanol. Makes us more dependant on foreign oil!

• Recap: Mandated, protected by tariffs and oil co receive subsidy.

Grain costsGrain costs

• Corn a record highs

• 40% of corn crop to ethanol

• Can’t use corn ethanol for food consumption… why

• Fertilizer

• $6 billion in costs

20122012

• Ca. will have to switch to sugar cane

• Tariff

• Corn won’t meet the standards

• 2015 Sugar cane won’t meet the standards

• What then?

The Truth 2009The Truth 2009

• SAN FRANCISCO (MarketWatch) -- Pacific Ethanol Inc., the largest West Coast producer of ethanol, said its subsidiaries filed for Chapter 11 bankruptcy protection Monday, the latest in a wave of companies dragged down by poor conditions in the U.S. ethanol market.

Now what?Now what?

• The Sacramento, Calif.-based ethanol producer lost $23.9 million for the period ended March 31, compared to a net loss of $35.2 million in the year-earlier period, while its average sales price per gallon of ethanol fell 28%, to $1.65 from $2.30.

They want a 15% mix!They want a 15% mix!

• Earlier this month, we reported that Pacific Ethanol’s Chapter 11 bankruptcy plan had been approved and that its four plants would soon be out of bankruptcy. That plan went into effect yesterday and the plants are now officially out of bankruptcy, having been transferred to a holding company called "New PEHC.”

• Pacific Ethanol will continue to operate the plants and market the ethanol they produce via a fee and profit-sharing arrangement. The plan has wiped $290 million in debt and additional liabilities from Pacific Ethanol’s balance sheet, and it has a 90-day exclusive option to buy a 25% equity interest in New PEHC for up to $30 million in cash

Ethanol and Green Tech will…Ethanol and Green Tech will…

• Be the next bubble to burst.

• Europe is pulling back on subsidies

• We won’t be able to afford it.

• Senate passed a bill to eliminate $6 billion in subsidies

• Congressman Wally Herger is carrying a bill.

What can you do.What can you do.

• Stay educated

• Know where to find the research

• Invite me or Sam to other meetings

• Talk to your Congressman

• Elect smart energy people

• Then support them.